Please see the email below and sign-on to help preserve and enhance the tremendous potential of the Wholesale Distributed Generation (WDG) market segment in accelerating the transition to a smart energy future. Pass this along to colleagues who want to see renewables flourish in the United States within the next 10 years...

As described in the original FIT Coalition (FITC) action alert dated 6/24, the FITC believes that CAISO’s effort at reforming its interconnection procedures and their proposed elimination of the Small Generator Interconnection Procedure (SGIP) will severely undermine the Wholesale Distributed Generation (WDG) market segment, which is comprised of 20 MW and below projects that are interconnected to the distribution grid.

The FITC has been a leading participant in the CAISO proceeding, including as an active member of its formal Working Group, and would like to submit the below and attached letter to CAISO leadership.As you will see, the letter outlines the steps we believe should be taken that will protect and promote Wholesale Distributed Generation.The letter will also be circulated to the leadership at FERC, Governor Arnold Schwarzenegger’s office, and other influential policymaking bodies.

Please let us know as soon as possible if we can add your name / company / organization to the letter as a co-signer.

Please email a confirmation to Action@...in order to be added to the letter and include the following information:

Name

Title

Company / Organization

Mailing address

Contact phone number

Contact email address

Thank you again for taking action with the FIT Coalition.We believe that we must succeed; otherwise California would be introducing significant obstacles to wholesale distributed generation at a time when that market segment is needed most.

Sincerely,

Craig Lewis

_________________________________

16 July 2010

The California Independent System Operator (CAISO)

110 Blue Ravine Road

Folsom, CA 95630

Dear CAISO Policy Makers:

The undersigned parties have come together to protest the current CAISO proposal to eliminate the Small Generator Interconnection Procedure (SGIP), which is the streamlined interconnection process for 20 megawatt (MW) and below energy projects.As an alternative to such a radical move, the undersigned parties recommend SGIP improvements that will help address all stakeholder needs.While we understand that the current SGIP process is overburdened, we believe that the details of CAISO’s proposed reform would severely undermine the Wholesale Distributed Generation (WDG) market segment, which is entirely encompassed by 20 MW and below projects.

Additionally, we believe that the proposed reform runs counter to the Federal Energy Regulatory Commission’s (FERC) Order No. 2006 which sought to:“(1) limit opportunities for transmitting utilities to favor their own generation, (2) remove unfair impediments to market entry for small generators by reducing interconnection costs and time, and (3) encourage investment in generation and transmission infrastructure, where needed.”

One of the major benefits of 20 MW and below renewable energy projects is the ability to rapidly develop and interconnect projects, creating jobs and helping to meet Renewable Portfolio Standards more quickly than under the traditional central-station model for renewables.For the reasons listed below, we are concerned that CAISO’s proposal to eliminate SGIP is a dangerous move that, if successful, would substantially slow the deployment of renewable energy and discourage investment in the most promising market segment that exists for renewable energy; at least within the next 10 years:

·The proposed interconnection process would take up to 2 years for all projects regardless of size, and perhaps even longer, substantially harming the ability of 20 MW and below renewable projects to come online quickly and cost-effectively.

·The claim stated by CAISO staff that the “Fast Track” process for 2 MW and under projects remains for small developers offers false hope, as the Fast Track has proven to be virtually unattainable for the developer community, and additionally, the 2 MW size limit is far too small.

·Similarly, the newly proposed “Independent Study Process” would amount to nothing more than another false hope, because it too has substantial eligibility requirements that make it virtually unattainable to developers.

·Finally, and perhaps most importantly, history has shown that the utilities typically reflect any SGIP changes in their Wholesale Distribution Access Tariffs (WDATs), making the current SGIP reform process a de facto reform of the WDATs.As a result, it is likely that any changes to SGIP would be crammed down on developers seeking to connect to the distribution grid, which is the primary point of interconnection for 20 MW and below projects.

As CAISO’s proposed reforms would effectively remove most of the benefits of small renewable projects, we propose to work with CAISO, the utilities, and FERC to improve the existing SGIP as follows:

·Increasing staff at CAISO and the utilities to work through the current backlogs in the serial and cluster interconnection studies.

·Mandating the advanced disclosure of viable interconnection locations, which would allow developers to focus their efforts in areas with interconnection viability and thereby reduce the time and effort wasted on studies by the CAISO and the utilities in locations that are not viable.Specifically, we recommend mandating that general categories of capacity for all utility substations be shared with the developer community.This information could be posted on specialized online maps with all substations coded as Green/Yellow/Red, reflecting whether the availability of interconnection capacity and other interconnection viability criteria are high/good, medium/neutral, or low/bad.Such maps have been used in Ontario, Canada and in California by Southern California Edison (SCE) and the Sacramento Municipal Utility District (SMUD).

·Removing excessive eligibility criteria from the existing SGIP “Fast Track” process and increasing the project size to 20 MW for projects that can connect without materially impacting the grid.One way to assess materiality is to use the modified Rule 21 requirement proposed by Black & Veatch and E3, consultants to the California Public Utilities Commission (CPUC) in the CPUC’s current Long Term Procurement Planning (LTPP) proceeding. As you might be aware, Black & Veatch and E3 worked closely with the CAISO in calculating how much potential there is to interconnect to the existing grid without material upgrades, and they proposed a modified Rule 21 that would expand the 15% hurdle to 30% for WDG solar projects, identifying the potential for roughly 10 GW of easy-to-interconnect WDG solar projects alone.

Mandating an official WDAT stakeholder process to ensure that all interested parties have input into any changes reflected in SGIP rather than allowing a de facto reform that would cram down major restrictions on small renewable energy projects that are intended to interconnect to distribution grids.

If CAISO fails to focus on improving SGIP, instead of simply attempting to eliminate it, the huge opportunity for California that is represented by the WDG market segment would be threatened before that tremendous potential had a chance to be realized.We ask for your partnership in achieving a much more sensible and responsible outcome.Please work with us to achieve a result that is far more promising for all developers, market segments, technologies, the State of California, and for the rest of the nation, which would likely follow California’s example.

As the voice for the below signed group, the FIT Coalition stands ready to discuss the recommended steps in detail.Further, all of the undersigned parties look forward to working with you to address these important issues.